Is Future Group eyeing Spykar stake?

After reports about South Korean major E-Land Group

and private equity firm India Value Fund (IVF) signing non-binding agreements to acquire controlling stake in home-grown denim brand Spykar Lifestyle, the media buzz is, it is Future Group’s investment-cum-business development company, Future Ventures, which is eyeing a deal and is said to be in talks with PE firm Avigo Capital. Sources claim that the firm is in talks with two domestic players as well as two international players and the deal could get through as early as March 2013.

Earlier it was reported that Spencer’s Retail, flagship company of RP-Sanjiv Goenka Group had joined the race to acquire the biggest domestic denim player. The 2003-formed PE fund manager had begun talks with various investment bankers for giving a sell mandate. Avigo is also looking for an enterprise value of Rs 350-400 crores for Spykar. Last year, Avigo had taken over the reins from the promoter after roping in its global investor, Metmin Investments, to acquire 30 per cent stake in Spykar by pumping in Rs 30 crores. Metmin Investments is owned by NRI tycoon Raj Bagri, who was the chairman of London Metal Exchange. In 2007, Avigo had invested about Rs 25 crores in Spykar.

Spykar, a known name in denim and casual wear was established by Prasad Pabrekar in 1992. Currently, Pabrekar holds 40 per cent stake in the company. It makes casual wear and accessories for men and women. Spykar products are sold through 1,000 multi-brand outlets and 198 exclusive brand outlets across the country.

Sources say, apart from the RP-Sanjiv Goenka group, Aditya Birla Group was also in discussions for acquiring the deal to expand its retail brand portfolio. Apart from these two companies, two PE funds, Everstone Capital and India Value Fund Advisors, have also shown their interest in Avigo’s stake.